Senators vague on tax-break cuts

Indiana Democratic Sen. Joe Donnelly’s proposal was three paragraphs long. Sen. John Thune (R-S.D.) called for major tax cuts without explaining how to finance them. Sen. Rand Paul (R-Ky.) skipped it altogether.

The Senate’s top tax writers are not getting a lot of help filling in their blank slate.

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Though their plan to throw out the Tax Code and start over sparked a lobbying frenzy, many senators ended up submitting vague proposals long on platitudes and short on specifics — or ignored it altogether.

That raises questions as to how ready lawmakers will be for a tax overhaul Finance Committee Chairman Max Baucus (D-Mont.) wants to take up as soon as September, though both he and ranking member Orrin Hatch of Utah said they were satisfied with their colleagues’ responses.

“There’s no way you can, either in a letter or just in a conversation, cover everything that you‘ve got to cover in a tax bill because it’s very complex,’’ said Hatch. “I have a pretty good idea of what they’d like to do.”

The blank-slate plan was designed to force senators to wrestle with the tough choices that would come with any overhaul. Though lawmakers routinely said they want to wipe away individual tax breaks to bring down tax rates and the deficit, they would likely have to tackle popular provisions such as the mortgage-interest deduction to make the numbers work.

They’ll need almost $4 trillion just to reduce each of the statutory rates by 5 percentage points, according to the nonpartisan Tax Policy Center, and that would leave nothing for deficit reduction.

“Everyone should understand the trade-offs,’’ Baucus and Hatch warned last month, in their letter announcing the blank-slate plan.

They asked colleagues to identify which breaks could stay and which should be repealed or “reformed” and promised to take elaborate steps to ensure their proposals would remain secret. Paper copies would be locked away in a safe, with only a few staffers allowed access, and nothing would be released until 2065. Proposals were due July 26.

Baucus declined to say how many submissions he received, though committee representatives said the panel has received proposals spanning more than 1,000 pages so far from at least 60 senators.

POLITICO requested proposals from every senator. As of noon Tuesday, 33 had provided what their representatives said were either their submissions or the highlights of their submissions. Seven other lawmakers offered proposals to the Finance Committee that they declined to share. Eight said they did not turn anything in, while the remainder did not respond to requests for comment.

Many of the submissions fell far short of the detailed proposals Baucus and Hatch had sought. Many discussed only general, and widely shared, goals of tax reform such as simplifying the code or promoting economic growth. Nevada Republican Sen. Dean Heller’s submission was just four paragraphs long.

Details on which provisions would have to go in order to finance any overhaul were scant. Thune proposed cutting the top rate to somewhere in the mid-to-high-20s, from the current 39.6 percent, without saying where he’d get the savings to avoid adding to the deficit.

“The specifics are obviously going to have to be worked out,’’ he said Tuesday.